The Elderly Poor Property Owner When we set out to untax the elderly poor property owner, we mean the elderly poor person who owns a little property. The most direct way to do this was proposed by Tom Paine, which is to levy a property tax only on land, and give each person over 65 (50 in Paines proposal), a per capita grant from the proceeds of the tax. Paines essay was the first social security proposal, and, I believe, the best. It is even on the Social Security Administrations website. Even without Paines rebates to the elderly, putting the property tax only on land lowers the taxes on most home owners, shifting the burden to absentee owners of blighted land and holders of prime commericial land who are not putting that land to serious use. However, adding in Paines rebate system doubly benefits elderly people who own property, for the per capita rebate can actually exceed the total property tax that person pays. Those who rent benefit as well. However, there are other elderly poor property owners. They arent elderly and they arent poor, but they own massive amounts of property that is elderly and poor. From Consol Energy, which owns most of the mineral rights of Western Pennsylvania, to US Steel, which is by far the largest land-owner in Allegheny County, down to hundreds of petty speculators who buy up old properties and milk them while they wait for urban renewal to buy them out and turn their neighborhoods around, these elderly poor property owners are a drag on the community. Unfortunately, HB 76 benefits these elderly poor property owners far more than it benefits ordinary elderly people. US Steel, for example, gets massive property tax cuts in exchange for trivial increases in sales taxes and no increase in personal income taxes, as they are not persons for personal income tax purposes. Buncher Corporation, which has held 80 acres of land in Pittsburghs Strip district idle for more than half a century, is another big winner. Moreover, when property taxes have been curtailed in other states, the curtailment has been followed by an orgy of land speculation by outside real estate interests. The result has been horrible real estate bubbles and crashes. For example, foreign investors acquired more California land in the 18 months following passage of Proposition 13 than they had accumulated during the entire history of that state. Californias housing affordability index, which had been 10% higher than the national average before Prop 13 passed, is now more than three times the national average. Contrary to the claim that cutting property taxes would reduce the number of foreclosures, the California bubble that Prop 13 generated made it the number one state for foreclosures between 2005 and 2012. It also centralized government, as their property tax had been a local tax, while the taxes that replaced it were mostly state taxes. Similar boom/bust cycles occurred Massachusetts when it followed Californias lead and in Nevada when it used mineral royalties and casino revenues to replace property taxes there. Michigan also found itself in serious trouble after curtailing property taxes, but it had to cope with the collapse of the auto industry. Yet Pittsburgh sailed through the collapse of Big Steel with barely a hiccup, because Pittsburgh had a property tax that was six times as high on land as on buildings. They had adopted that tax in 1913, and missed every housig bubble of the 20th century, including the Roaring Twenties and the Great Depression. Land values fell less in Pittsburgh than in Washington DC, which was the boom-town of the 1930s. We can give tax relief to ordinary people without giving much larger breaks to giant corporations holding land idle, without centralizing government, without a higher sales tax, without causing housing bubbles, and without making ordinary citizens pay twice as much during their working years as they would save when they retire. Dont Californicate Pennsylvania. Scrap HB 76 and support what the founders of this country actually wanted: High taxes on land and no taxes on buildings. Add Tom Paines proposal for a per capita grant to the elderly, and we accomplish all the things HB 76 fails to accomplish. savingcommunities.org/graphics/shutdownmilltall72.jpg
Posted on: Mon, 15 Sep 2014 01:57:09 +0000
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